Quinn floats more money for cities from tax hike

Gov. Pat Quinn talked about his potential changes to his plan to make the income-tax increase permanent during a speech today at the City Club of Chicago. (Terrence Antonio James)

Gov. Pat Quinn said today that he’s open to increasing the share of Illinois income tax revenue cities receive, saying cash-strapped towns could use the extra money to prevent property tax increases.

The Democratic governor stopped short of saying the idea could serve as an alternative to a plan pushed by Mayor Rahm Emanuel that would raise city property taxes as a way to fund Chicago’s struggling pension systems.

Quinn floated the idea during an address before the City Club of Chicago as he works to build support for his budget plan as lawmakers enter the final frenzied weeks of the spring legislative session. Quinn’s spending proposal relies on legislators making the temporary income tax increase he signed into law permanent. Portions of the tax are set to expire starting in January.

“I think it’s really important that we use the opportunity of the next 30 days or so to really say if we want to help our local units of government, what’s the best way to do it?” Quinn said. “If we have more revenue sharing from the income tax, I’m definitely willing to engage in that discussion… Don’t you think that’s a better way to go than to say to local units of government that the only alternative you have, the only resort, is to raise property taxes?”

Legislation that would clear the way for Chicago to raise property taxes to fund pensions is on Quinn’s desk, though he has refused to say if he will sign it. But Chicago isn’t the only municipality seeking pension relief, and indicating he’d be willing to share more money with towns and cities could help the governor pick up votes in favor of extending the unpopular income tax increase. He has also said the money would be used to increase education funding and provide homeowners with a $500 annual property tax rebate.

As it stands, the state shares 6 percent of individual income tax revenues and 6.8 percent of corporate tax revenues with local governments, which is doled out based on population. That total was more than $1.3 billion last year, with nearly $253 million going to Chicago, according to the Illinois Department of Revenue.

The governor also attacked his Republican opponent Bruce Rauner, who has said he would let the income tax expire on schedule and make unspecified cuts to correspond with the loss in revenue. Quinn said that idea “doesn’t add up.”